Budget brings a little help to private practitioners
Key changes outlined in Chancellor Jeremy Hunt’s Spring Budget will bring some business help to doctors in private practice, accountants say.
Most – but not all doctors – can look forward to a further 2% reduction in National Insurance contributions from 6 April 2024.
This follows a 2% cut announced at the end of last year and took effect from 6 January 2024.
But for those whose primary source of income is from employments, from 6 April 2024 the main rate of employee National Insurance Contributions will be 8%.
For those whose primary source of income is from self-employed income, from 6 April the main rate of Class 4 National Insurance Contributions will be 6%.
Alec James
Independent Practitioner Today columnist Alec James, a specialist medical accountant with Sandison Easson, said: ‘For most higher-rate taxpayers, this will result in an extra £1,300 in your take-home pay for 2024-25 compared to 2023-24.
VAT
For those who have income which is considered a taxable supply for VAT purposes – such as independent practitioners doing medico-legal work – the registration threshold for the tax has been increased from £85,000 to £90,000.
The deregistration threshold has also gone up to £88,000. These increases take place from 1 April 2024.
Properties
The sale of a residential property that is not your main place of residence is subject to capital gains yax (CGT). In the Budget, it was announced that higher rate CGT on these gains will be reduced from 28% to 24% from 6 April 2024. The other CGT rates remain unchanged.
Mr James said: ‘The Chancellor has abolished the reliefs and preferential treatment relating to furnished holiday lets with effect from April 2025 and multiple dwelling relief for Stamp Duty Land Tax (SDLT) will be abolished from 1 June 2024, although, the relief may still be available for contracts exchanged before 6 March 2024.’
Child Benefit
While not applicable to most senior doctors, for those who are part-time or are registrars with children, the High Income Child Benefit Charge (HICBC) threshold has been increased.
Mr James commented: ‘Previously, those whose “adjusted income” was in excess of £50,000 and either cohabiting parent was claiming Child Benefit, the higher earner was subject to HICBC.
‘This results in the individual paying a proportion of the claimed benefits back.
‘Those whose threshold income was £60,000 or more were fully tapered, resulting in all child benefits claimed in the tax year being repayable to HM Revenue and Customs (HMRC). Thresholds will be increased from 6 April 2024 to £60,000 to £80,000, meaning many more taxpayers will be eligible to retain the benefit.’
Details are due on a reform of the Non-Domicile rules from April 2025, which HMRC has described as a ‘modernised regime that is simpler and fairer’.
Pensions
Alec Collie, head of medical at Wesleyan Financial Services, said: ‘No news is relatively good news. Doctors will be glad that this Budget didn’t bring any bombshell reversals of pension or savings policy or heap new complexity on what are already very complex regimes.
‘For consultants, this will build on the optimism that many may be feeling following the newly announced pay deal.
‘Many doctors will still be wary, however, that – in an election year – issues like NHS pensions and workforce support will become increasingly used as political footballs.
‘To support our medical workforce, and help them plan with confidence, we need policy that’s consistent, built on consensus and designed with a long-term view in mind.’
Fuel
The Social Market Foundation’s think-tank senior researcher Gideon Salutin commented that the fuel duty freeze would save the richest tenth of households in the UK an extra £60 a year.
‘The rhetoric around fuel duty focuses on the “families and sole traders” it supposedly protects from poverty. But after spending £130bn on cuts and freezes over the past 13 years, the policy has only decreased the average household’s motoring costs by £13 a month,’ he said.
Achieving a more meaningful reduction in transport expenses required the Government to invest in cheaper, greener alternatives like public transport and electric vehicles, but the Budget did little to enhance those options for low-income households.